March 2, 2016
Hunting For A Cause — The Benefits of Cause-Related Marketing
This past February was American Heart Health month, and to help get the word out, Macy’s department stores teamed up with the American Heart Association’s “Go Red For Women” national campaign to raise money for and promote the importance of fighting heart disease among women. This is a great example of for-profit corporations and nonprofit organizations using the magic of cause-related marketing to collaborate and have a positive impact in the community. Since 2004, Macy’s has raised more than $50 million to raise awareness about heart disease and support the AHA through efforts that include selling exclusively designed, limited-edition red dresses with all proceeds going to benefit the cause. Other popular brands such as The Gap (Project (Red)), Pampers (UNICEF) and TOMS Shoes (One for One) also recognize the benefits of cause-related marketing and for years have allocated large portions of their budgets to these promotions.
In our own industry, many companies are engaged in cause-related marketing through NSSF’s Project ChildSafe – “Own it? Respect it. Secure it.” initiative. Chances are you’ve run into other such promotions at your local outdoor outfitter where a donation may be made to a national charity for a particular product purchased, or, say, in exchange for “liking” a shooting range’s Facebook page the business makes a contribution to a local cause.
Cause-related marketing (or simply “cause marketing” for short) refers to mutually beneficial marketing partnerships between corporations and nonprofits whereby a brand is aligned with a charitable or other worthy cause. Companies that embrace a cause not only do good but are seen to be doing good by the public. Cause marketing promotions, if done correctly, have the power to increase corporate profits and create shareholder value, strengthen or revitalize brand image and, in some instances, be the deciding factor in cause-conscientious customers choosing one company’s product over a competitor’s.
Nonprofit organizations win big too in the cause marketing equation. With the muscle and resources of big brands behind them, nonprofits can spread their messages using a broader range of communication vehicles than they traditionally have access to, allowing them to engage and educate more and varied constituents almost anywhere. This means a greater promotion for a nonprofit’s cause that ultimately can result in increased funding from diverse sources. How well can this approach work? Ever since American Express and the Statue of Liberty Restoration Fund teamed up more than 30 years ago to raise funds to support the restoration of New York’s famous icon, cause marketing promotions have become one of the most effective business strategies for corporations and nonprofits and can be seen in virtually every checkout aisle from national big-box retailers to your local neighborhood drug store.
But cause marketing is more than simply giving money to a cause. Cause marketing also stands at the intersection of corporate philanthropy and corporate event sponsorships, and while the three share common threads, cause marketing has a largely different goal than either philanthropy or sponsorships generally have. With philanthropy, companies typically give money or in-kind contributions to a charity that the charity then uses to carry out its mission. It is a passive corporate activity that may or may not get any benefits to a business other than a thank you and possible tax breaks. Companies that sponsor events, on the other hand, give money to an organization for a chance at some publicity, which may or may not directly result in more product sales.
In contrast, cause marketing promotions, have the specific and dual goals of marketing a company and attacking sensitive and important societal issues. That makes such efforts long-term strategic collaborations between a company and a charity in which the company is able to actively drive the growth of its own business by supporting an organization whose mission has a positive impact on society. If this is not reason enough to get on the cause marketing train, companies should also consider that many consumers fancy businesses that give back and are likely to be more loyal or switch to a brand that supports worthy causes.
The firearms industry is known for giving back to the community. You do not need to look far to find a retailer willing to donate prizes to their local charity fun shoot or a manufacturer willing to sponsor an event honoring our brave and remarkable military veterans. Many companies have taken this passion for giving back to the next level by also becoming long-term supporters of environment and wildlife conservation, youth services and medical training organizations, allowing those companies to integrate the important messaging of those causes into their home-base promotions.
Joining the long list of causes supported by industry is NSSF’s Project ChildSafe firearms safety education initiative that, at last count, had nearly 1,400 corporate partners. Project ChildSafe is a real solution to making our communities safer, having distributed more than 37 million free firearms locks and safety education materials to gun owners in all 50 states and the five U.S. territories, the goal being the prevention of firearm accidents, theft and misuse. Thanks to firearm safety initiatives like Project ChildSafe and its corporate partners in raising public awareness about the safe and responsible ownership of firearms and the importance of securely storing firearms when not in use, fatal firearms accidents are at historic low levels.
Some ways companies are partnering with Project ChildSafe include displaying the Project ChildSafe “Own it? Respect it Secure it.” logo on their websites and in product catalogs, packaging Project ChildSafe safety kits with their products and distributing Project ChildSafe safety education information at public events. For more information about Project ChildSafe or how your company can become a long-term partner of the initiative through the 501(c)(3) tax-exempt Project ChildSafe Foundation, visit www.projectchildsafe.org.
Like other marketing activities, cause marketing promotions not only require careful planning but also the consideration of state and federal consumer protection and tax regulations. Before your marketing department forges ahead, it should review these regulations with legal and tax counsel who can assist in structuring such promotions so that they are a win-win for everyone involved. Too, corporate marketers should be well aware of federal truth-in-advertising laws that, in the context of cause marketing, means companies have responsibilities to avoid misrepresenting their relationships with charities and misleading or confusing consumers. For instance, if a company is planning to run a promotion where a contribution will be made for every product purchased, the company needs to clearly tell consumers about the effects purchases may have on donations.
Another thing to consider is that while a company may have good intentions, using a charity’s name in product advertising without that charity’s knowledge or authorization could falsely imply that the charity mutually endorses your company. Additionally, failing to disclose to consumers inconspicuous and clear terms the amount the company will donate to a charity or how donations will be derived could get a company in trouble. For additional guidance on crafting disclosures in connection with promotions benefiting charities, companies should review the Better Business Bureau’s Guidelines for Cause-Related Marketing.
States are also concerned with protecting the public from commercial promotions that appeal to consumer charitable impulses. Generally, state commercial co-venturer (CCV) laws will be triggered when a for-profit company advertises that it is raising money for a charity. Under CCV laws, businesses may have to register with state authorities in order to pursue cause marketing promotions or take other steps such as posting a bond, filing a copy of the contract governing the co-venture with the charity with the state, or giving the state an accounting of all proceeds collected from the co-venture. While compliance with state commercial co-venture requirements is not overly complicated, these requirements vary, so it is always wise to seek the advice of experienced marketing and advertising legal counsel when planning a cause marketing promotion.